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On the cusp of change: The elements of health care transformation

Although no one is certain what the health care landscape will look like 10 years from now, it is clear that stakeholders across the industry see a system on the cusp of vast transformation. Experts speaking Thursday at Institute 2013, the annual AHIP gathering, sought to make the case for that transformation on a number of fronts, boiled down by Cleveland Clinic CEO Dr. Toby Cosgrove into three areas of focus: Opening access, improving quality and lowering costs. Here’s a snapshot of what speakers said must be involved: Technology: Kaiser Permanente Chairman and CEO George Halvorson spoke passionately about the need for connectivity across health records systems. Kaiser Permanente follows a policy of ensuring clinicians who interact with an individual have “all the data about all the patients all the time.” The implications are life saving, he said, noting Kaiser has seen death rates from stroke drop by 30% and heart disease by 40%. Cleveland Clinic’s Cosgrove also demonstrated the power of electronic health records for cutting waste. His organization took aim at redundant lab tests, putting stops in their system to prevent thousands of unneeded tests. Payment models, quality and value: Fee-for-service models reward physicians on a procedural basis for more care, not better care. New models can foster innovation and ultimately improve health outcomes, experts said. Halvorson offered an example: Pressure ulcers affect 5% to 10% of patients in the U.S., he said. Under a fee-for-service model, a patient who develops a pressure ulcer and needs treatment ultimately brings in more revenue than a patient who doesn’t. Meanwhile, a bundled payment model incentivizes prevention, and according to Halvorson, translates into real change seen at Kaiser: pressure ulcer rates of 1% or less. “Caregivers can re-engineer and do really smart things that change the trajectory of care,” he said. In another case study, Cosgrove shed light on a system that has been able to turn around disappointing trends on quality and costs. His organization employs salaried physicians who are all subject to annual review, creating a system of accountability while removing the incentive to do more when less might be better. Cleveland Clinic has focused aggressively on these issues, taking steps from scrutinizing the cost of sutures and other basics to developing quality metrics and reporting on them. Breaking down the cost data: Recent reports have cast a spotlight on the high cost of care in the U.S. relative to other countries, and sweeping campaigns have been developed to address the very real issue of high utilization. Yet, digging a bit deeper into the data, Health Net President and CEO Jay Gellert said the root issue is the relatively higher per-unit cost of care in the U.S. compared with other countries — bypass surgery, hospitalization, MRI to name a few examples — rather than overall spending as a percentage of GDP, which is more closely aligned with international data. Within states, too, there are wide spending disparities with little understanding of why. Gellert cited data from California, where daily hospitalization costs are 60.3% higher in Sacramento compared with Los Angeles. Health plans and others will need to look at why that is, he said, and then address it. It’s clear there is some upheaval on the horizon, but speakers all seemed to have their eye on the same ball: health, at a price we can all afford.